Important steps for future business owners

Thinking of starting a business? One of the most important first steps for new entrepreneurs and future business owners is to ensure the right business structure is chosen. That’s not all though, there’re a few other tips and best practices for those starting out. Let’s take a look.

Choose a business structure
Each business structure has different tax filing requirements and legal considerations. Knowing the difference between them can help determine which option is best. The most common are:

• Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
• Partnership: An unincorporated business with ownership shared between two or more people.
• Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
• S corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
• Limited liability company: A business structure allowed by state statute.

Contact us to help you setup your new entity, call or txt us today 717-759-4227

Choose a tax year
A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:

• Calendar year: 12 consecutive months beginning January 1 and ending December 31.
• Fiscal year: 12 consecutive months ending on the last day of any month except December.

Apply for an employer identification number
An EIN is also called a federal tax identification number. It’s used to identify a business. Most businesses need one even if they don’t have employees. They can get an EIN for free directly from the IRS in minutes.

Make sure all employees have completed these forms

• Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
• Form W-4 Employee’s Withholding Allowance Certificate

Pay all applicable taxes
The form of business determines what taxes must be paid and how to pay them. Authorized users of certain entity types can securely access and manage their federal tax records and information online through Business Tax Account. BTA supports access for the following organizational types: sole proprietorships, partnerships, S corporations, C corporations, federal, state and local governments, Indian tribal governments, and tax-exempt organizations.

Check state specific requirements
Prospective business owners should visit their state’s website for info about state requirements.